Netflix CEO Reed Hastings Buys $1M Facebook Stock

As Facebook insiders get ready to flood the market with their shares, Netflix (NASDAQ:NFLX) CEO Hastings spent $1 million and bought 47,846 shares of Facebook at $21.03 a share. Those are the only Facebook stock he owns. Reed Hastings has served as a member of Facebook board of directors since June 2011. He is the CEO and Chairman of Netflix and also serves on the board of Microsoft (NASDAQ:MSFT).

Facebook shares has lost more than 40% since its IPO at $38. Many investors who bought into the shares after the IPO are angry at Facebook insiders and earlier investors. To be fair, no one forced these investors to buy Facebook shares. Many of them fall into love with Facebook and then bought the shares, although most of them have probably never bought anything through the advertisement on Facebook.

Facebook shares were priced at unsustainable levels at the IPO. The company has yet to find a way to monetize from its user base as the growth slows down. Two and half months after the IPO, Facebook’s lockup period will start to expire. On Aug. 15, 268 million shares will hit the market. On Nov. 14, another 1.3 billion shares will become available. With all these shares flood to the market, it is interesting to see how Facebook shares will fare.

Reed Hastings has been constantly selling Netflix shares over the past few years when the stock was trading up all the way to almost $300 a share. He stopped selling the shares when the stock collapsed to $111 a share. Today Netflix is traded at around $57.

Does Reed Hastings’ purchase indicate that he has confidence in Facebook stock? Or at least he has more confidence in Facebook stock than in Netflix? Above all, he never bought any Netflix stock after the stock price collapsed.

Disclaimers: GuruFocus.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on GuruFocus.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The gurus may buy and sell securities before and after any particular article and report and information herein is published, with respect to the securities discussed in any article and report posted herein. In no event shall GuruFocus.com be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on GuruFocus.com, or relating to the use of, or inability to use, GuruFocus.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. The gurus listed in this website are not affiliated with GuruFocus.com, LLC.
Stock quotes provided by InterActive Data. Fundamental company data provided by Morningstar, updated daily.